$115m Lucky Bay Port Development Breakthrough

South Australia’s first farmer and private equity partnership port will be built at Lucky Bay on Eyre Peninsula, providing an alternative grain storage and export option which will be fully operational for the 2018-19 grain harvest.

Funding for the $115 million port infrastructure and supply chain development project was finalised last week, which involved securing $96 million in private investor equity and debt. As a result, on-ground work is due to commence immediately.

After an expression of interest phase last year, 120 EP grain growers indicated their support for the project with 377,000 tonnes of estimated throughput. These growers will acquire equity in the port for ongoing throughput over the next seven years.

- A state-of-the-art shallow draft transhipment vessel with a 3500-tonne capacity, allowing Panamax vessels to be loaded within the usual five-day industry standard. The transhipment vessel is currently under construction in China.

- Grain storage facilities at the port, with the capacity to hold 387,000 tonnes.

- Up-country storage at Lock with the capacity to hold 150,000 tonnes.

In addition to the increased competition in the EP supply chain, grain growers are expected to save from $5-$20 per tonne in transporting grain from farm to port, depending on their proximity to Lucky Bay.

Future diversification at the port into fertiliser importation will generate further freight savings of $25-$40/t for growers currently importing fertiliser from Port Lincoln and Port Adelaide. Over time, growers could avoid upland storage fees by building on-farm storage to deliver directly to Lucky Bay.

The port’s development has been a joint venture between Inheritance Capital Asset Management (ICAM), Duxton Asset Management and Sea Transport Corporation, a world leader in transhipment vessels. From these three partners, a new company has been formed as the port operating entity following settlement. The new company is named T-Ports, an abbreviation of transhipment ports.

The ports will be multi-user and multi-commodity transhipment ports, with the first at Lucky Bay and a second under investigation for Yorke Peninsula.

“South Australia is in need of new export infrastructure in order to improve agricultural economics and allow development of its mining assets in an increasingly competitive world environment,” Mr Chapman said.

“While this port development is based on agricultural product, it can readily expand to allow exports of local minerals and T-Ports will be pursuing opportunities to further diversify and grow the commodity base.”

T-Ports CEO Kieran Carvill says the clear direction from growers has been to increase supply chain efficiency which will be achieved through Lucky Bay as a low capital expenditure and flexible port close to the product origin.

“This investment innovates upon the traditional port model and almost monopolistic grain supply chain in South Australia through proven transhipping technology that has been utilised in other industries for the past 20 years,” Mr Carvill said.

“The lower build cost and lower environmental footprint compared with traditional export port facilities in South Australia has made the financial feasibility of the investment easier to attain with a lower throughput requirement from growers.

“This model means growers can access multiple small ports that can load vessels up to and including cape size, allowing product to be exported profitably, which will prove a great benefit to EP growers and South Australia.”

Lock grain grower and T-Ports Board Member Andrew Polkinghorne says the Lucky Bay project had been the breakthrough that many EP growers were waiting for in supply chain competition.

“While there have been a number of projects flagged for EP, Lucky Bay is a reality, it is funded and work is starting. The benefits of this project will flow through to farming families, and their local communities, as they secure equity in T-Ports and, as a result, a share of the profits of storing and shipping their grain.

“EP growers who did not respond during the EOI period can still be involved. A retail fund will be set-up before June 2018 that gives growers the opportunity to have some cash ownership in the development and either become involved or further increase their support.

“It’s a great outcome for EP growers, the investors who supported it and the state as a whole.”

Rob Chapman is a principal investor in the ICAM business and provides strategic advice to the Board and Management.

He is the Chairman of Adelaide Airport Ltd, Non-Executive Chairman of Perks, a member of the South Australian Government’s Economic Development Cabinet Committee and is the Global Chairman of Investment Attraction SA, Chairman of Barossa Valley Infrastructure Ltd, Chairman of the Adelaide Football Club and Director of Coopers Brewery Pty Ltd.

Prior to his current appointments, Rob was Managing Director of Bank SA and Chief Executive of St George Bank. Rob is past President of Business SA and CEDA South Australia.

Rob has been recognised for his consistent pursuit of excellence and outstanding contribution to South Australia with the 2005 SA Great Award for Business.

Rob’s early career was spent in the insurance and funds management industry, initially in Adelaide, then in Brisbane, Sydney and Melbourne before returning to Adelaide and assuming executive roles in banking.

Stuart Ballantyne

Stuart has been Chairman of Sea Transport Corporation since its inception in 1976. Stuart has been the principal consultant and tactician for numerous large successful projects. These included the establishment of Fiji’s Inter Island Roro Ferry Service, the profitable Kangaroo Island Ferry Service in South Australia, Peninsula Searoad Transport in Victoria, Bahamas Searoad, Sea SA and the MacArthur River Lead Zinc Project, which used an innovative self-discharging bulk carrier design to establish a viable remote lead zinc mine.

Stuart is a fellow of the Royal Institution of Naval Architects and has written numerous nautical publications and papers. He has a long list of awards including the ICHCA Annual Award 1996, Seatrade Award 1997 (London), Cruise and Ferry Award 2003 (London), AUSMEPA Marine Environment Award 2006 (Sydney) and the Institute of Export – Export Hero of the Year 2008 (Australia).

Stuart holds a Masters of Philosophy (Naval Architecture) from Strathclyde University, Scotland, and was awarded an honorary doctorate in science from Strathclyde in 2014 for his services to the maritime Industry.

Andrew Polkinghorne

Andrew is a grain producer at Lock, South Australia, where he farms nearly 7000 hectares with his family.

He is a former Chair of the Australian Grain Growers Cooperative, a grain trading company he helped establish as a member of its implementation committee. He is also a past Chair of Minnipa Agricultural Centre Management Committee, the Eyre Peninsula largest agricultural research and development organisation, working with farmers to increase their productivity and profitability.

He previously worked as the General Manager of Farm Services at the Roseworthy Campus of the University of Adelaide. Andrew was also a previous member of the Free Eyre Steering Committee. Andrew holds a Bachelor of Business (Agriculture) and a Diploma (Honours) in Farm Management.

Kieran Carvill

Kieran’s role is to oversee the development and operations of T-Ports in Australia. Originally from Ireland, Kieran’s background is in shipping and grain trading and he has worked with a number of well-known global companies in the industry.

Kieran has worked with Sea Transport Corporation since 2014 where he was responsible for the creation and development of a portfolio of agricultural and mineral port projects in Australia and Asia.

Kieran was CBICS / KCH Steel International Sales and Procurement Manager, responsible for creation and development of a portfolio of suppliers and customers in Asia. He was subsequently appointed Managing Director, taking on team management and strategic development worldwide.

He spent three years at AC Toepfer as European and Eastern European Grain Trading Manager working across market risk, trade profitability, analysis, strategy and the management of pan European trading.

Other roles include International Commodity Manager and World Product Manager for Cargill where he managed the full trading and back office team, worldwide coarse grain trading, pan European wheat and coarse grain trading, as well as Company representation with the European Union.

Kieran holds a Masters of Economics from The University of Dublin and is fluent in German, English, and French.

Tim Gurney

Tim has a wealth of experience in grain storage, exports and port management having successfully managed five of South Australia’s seven grain ports. He is a driven and experienced professional who strives for efficient safe handling of high quality products so end users are highly satisfied.

Tim has professional expertise in the storage and handling of more than 30 types of grain as well as non-grain commodities including fertiliser, salt, mineral sands, dolomite, gypsum and limestone.

He has managed nearly 50 up-country grain storage facilities, including 13 large bunker sites, in SA over the past 23 years, and all five of the major grain port facilities on the Yorke Peninsula and Eyre Peninsula.

Tim has been heavily involved in the design, construction and commissioning of many strategic grain sites across SA.

He chaired SA’s grain processing group responsible for eight grain cleaning sites and has managed three fertiliser import and storage distribution outlets on Yorke Peninsula and Eyre Peninsula.

His extensive work on EP and YP has enabled him to establish many credible and valuable relationships with growers.

Mark Antushka

Mark has more than 20 years’ experience in management of business, project and commercial developments in the grain industry. He was Bunge Capital Projects Manager from 2010 and 2016, where he established the $50 million Bunbury Grain Export Terminal, country feeder sites and the inaugural enterprise agreement for Bunge Grain Services.

Between 2007 and 2010, Mark was Deputy General Manager of New World Grain, a joint venture agribusiness company between ABB Grain and the Soufflet Group, marketing and exporting grain from the Ukraine’s Black Sea region. In this role, he co-negotiated exclusive export agreements with port terminal operators and supervised execution of ABB’s first barley shipments from the Black Sea.

From 2002 to 2007, Mark worked as ABB Grain National Logistics Manager where he supervised ABB’s entire national supply chain from farm to ship. In this capacity, Mark negotiated road, rail and warehousing supply chain services valued at up to $200 million per year.

Mark holds a Bachelor of Arts in Accountancy and a Graduate Diploma in Business Marketing from the University of South Australia and a Graduate Diploma in Applied Finance and Investment from the Securities Institute of Australia.

Claire WildeClaire Wilde joined Duxton Asset Management in March 2018 and is responsible for overseeing the finance function for T-Ports as well as the newly listed Duxton Broadacre Farms.

Prior to joining Duxton, Claire held finance positions in the oil and gas, aviation and agricultural industries. She holds a Bachelor of Commerce (Accounting and Finance) and is a member of CPA Australia.